Are You Ready for PPACA? Employers Count the Days
Original article from forbes.com
As the full enactment of PPACA approaches, there are many factors that business owners know to look out for.
- Do I need to provide health insurance to my employees?
- Should I go to an exchange?
- How will the mandate impact my business and profitability?
- How much are my health insurance premiums going to go up?
These are all questions that many business owners are starting to look. Below are some points that you may not have thought of that should go into your business planning.
We all know that health insurance premiums are expected to go up, but do you know how much? Small groups (2-99 employees) can expect to see price increases between 20% and 50% upon the full enactment of reform. When factoring in medical trend, taxes and fees, carrier and product changes and the introduction of community rating, your premiums will jump significantly. As a small business owner, asking your existing broker for a quote is not going to solve this problem as it will require a new method behind providing employees with health insurance. The objective of a health insurance plan should not be to carry you over to the next year with as little pain as possible, but to address your company’s healthcare expenses for the long term. You need a road map that will allow you to offer affordable coverage to employees while keeping costs in line.
Some employers are looking to drop plans in order to remain profitable. Unfortunately, this is not the answer either and can cause more pain than gain. With the Supreme Court upholding the individual mandate, all Americans will be required to obtain health insurance or pay a penalty. The cost of obtaining coverage for individuals is expected to jump 100% – 200% with an average increase of 116%. This is going to push many employees who either have individual plans or would ordinarily look at obtaining individual plans to go to their employer to obtain coverage. By not obtaining small group coverage, you risk losing your talent to other companies who are willing to absorb the cost. This can result in the loss of business and inevitably impact the bottom line more then not offering coverage at all.
The federal funding for health care reform is already facing challenges that will impact all small business owners. In the deal that was reached in the fiscal cliff debate, an agreement was made to cut the remaining $1.9 billion dollars that was set to fund Consumer Oriented Operated Plans (CO-OP’s) through the Affordable Care Act. $1.9 billion was already spent to fund the creation of CO-OP’s. These will remain in place; however no more federal money will be used to create any additional CO-OP’s at this time. This is another example of where PPACA has been modified in order to maintain its functionality. This will lead to higher costs in term of premium and taxes for small business owners and individuals seeking health insurance in the short term, to cover the high costs of implementing the systems and covering up all other budget shortfalls that would have ordinarily paid for these costs.
Putting off PPACA with early plan renewals
Original article from benefitspro.com
By Allen Greenberg
Why wait?
That’s the attitude a growing number of employers are expected to adopt this year when it comes to renewing their health plans and, as a result, putting off the day when they have to deal with the many provisions of the Patient Protection and Affordable Care Act.
“It’s actually not anything new,” said Cheryl Randolph, a spokeswoman for United HealthCare Group. “Employers have always had this option.”
Of course, that’s true. But this year’s different.
With the PPACA going into full effect Jan. 1, a number of employers are expected to pull the trigger on renewals in November and December. Just how many, no one knows right now.
But UnitedHealth, Humana and Aetna, among others, are all expected to offer early renewals, health insurance brokers say.
There’s plenty of incentive for employers to renew early.
Health insurance premiums on average could rise by 40 percent under the Patient Protection and Affordable Care Act, according to a study by Milliman, the consulting firm. The study was done on behalf of Center Forward, a bipartisan organization. It focused on premiums for individual and group comprehensive medical insurance plans in Arizona, Florida, Illinois, New Jersey, Ohio and Wisconsin.
Individual premiums, on average, will increase 25 percent to 40 percent due to PPACA, the firm said, while small market group premiums could increase by 6 percent to 12 percent.
Karen Harrison, a broker with Lakewood, Colo.-based Braddock Harrison Agency, said she expected to receive renewal packages from carriers in late August and was letting her clients know now they should consider early renewals this year.
“There are pros and cons to doing this,” Harrison said.
One con? Any employer renewing early this year would not be able to move their renewal date again.
The big pro? For companies with younger, healthier employees, renewing early could limit their rate increase to 15 percent or less, according to an estimated projection Humana shared with brokers.
Whether renewing early will work as a strategy is unclear.
The Illinois Department of Insurance recently warned health insurers it wouldn't approve policies with "arbitrary" renewal dates meant to "delay compliance with the reforms." Also, Rhode Island said it wouldn't approve early renewals of health plans for small businesses.
Harrison, for one, said she didn’t think regulators would have much choice.
“So long as everyone follows the rules, I think it would be very hard” to fight this, she said.
Final ACA wellness rules issued
Original article from eba.benefitnews.com
By Amy Gordon and Jamie Weyeneth
On May 29, the U.S. Departments of the Treasury, Labor (DOL) and Health and Human Services issued final regulations amending the 2006 HIPAA nondiscrimination wellness regulations to implement the employer wellness program provisions of the Affordable Care Act. The final rules retain the two categories of wellness programs – “participatory wellness programs” and “health-contingent wellness programs.” The final rules do not deviate extensively from the proposed regulations issued in November 2012, although the content has been reorganized to more clearly set forth the requirements for each type of wellness program. The participatory wellness program rules are basically unchanged from the current 2006 regulations – participatory wellness programs comply with the HIPAA nondiscrimination requirements as long as the participant does not have to satisfy any additional standards and participation in the program is made available to all similarly situated individuals, regardless of health status. However, the final rules update and expand on the requirements for health-contingent wellness programs, which condition a reward on a participant’s satisfaction of a standard related to a health factor.
Under the final rules, there are two types of health-contingent wellness programs – “activity-only” programs and “outcome-based” programs. An activity-based wellness program provides a reward if an individual performs or completes an activity related to a health factor, but it does not require the individual to satisfy any specific health outcome. Examples include walking or exercise programs in which a reward is provided just for participation, or rewards for taking a health risk assessment without requiring any further action. An outcome-based wellness program requires an individual to either attain or maintain a specific health outcome – for example, not smoking or achieving certain results in biometric screenings – in order to obtain a reward.
All health-contingent wellness programs must meet five requirements:
1. Eligible individuals must be given an opportunity to qualify for the reward at least once per year.
2. Generally, the reward may not exceed 30% of the total cost of employee-only coverage (including both the employee and employer portion of the cost of coverage). If dependents are permitted to participate, the reward can be calculated on the basis of 30% of the cost of coverage in which the employee and any dependents are enrolled. In the case of a program designed to reduce or prevent tobacco use, the maximum reward amount is 50% of the total cost of coverage. The reward limit is cumulative for all health-contingent wellness programs.
3. The program must be reasonably designed to promote health or prevent disease.
4. For an activity-based wellness program, the full reward must be available to all similarly situated individuals by offering a reasonable alternative standard for obtaining a reward if it is either unreasonably difficult due to a medical condition to satisfy or medically inadvisable to attempt to satisfy the otherwise applicable standard. A wellness program can require verification from a physician that an individual’s health factor makes it unreasonably difficult or medically inadvisable to attempt to satisfy the regular standard.
For an outcome-based wellness program, the full reward must be available to anyone who does not meet the standard based on the initial measurement, test, or screening. The alternative standard cannot be a requirement to meet a different level of the same standard without additional time to comply – for example, if the initial standard is to achieve a body mass index of less than 30, the reasonable alternative standard cannot be to achieve a BMI of less than 31 on that same date, but it might be reasonable to require the individual to reduce his or her BMI by a smaller amount over the course of a year or other realistic period of time. If the individual’s physician joins in the individual’s request for an alternative standard, the physician can be involved in setting (and adjusting) a second alternative standard, consistent with medical appropriateness.
An alternative standard is not reasonable under either type of program unless the time commitment required to satisfy the standard is reasonable. If the alternative standard requires completion of an educational or diet program, the employer must assist the individual in finding the program, and the individual cannot be required to pay for the cost of the program. The alternative standard must accommodate the recommendations of an individual’s personal physician as to medical appropriateness.
5. The availability of a reasonable alternative standard to qualify for the reward must be disclosed in all materials describing the terms of the wellness program. For an outcome-based wellness program, a similar statement must be included in a notice that the individual did not satisfy the initial outcome-based standard. Sample language is provided in the final rule.
The final rules apply to both grandfathered and non-grandfathered group health plans in both the insured and self-insured markets and are effective for plan years beginning on or after January 1, 2014. Plan sponsors and issuers should review their current wellness programs and health plan communications in light of these final rules.
Employers Gear Up For Health Care Changes
Original article from insurancenewsnet.com
By Cyril Tuohy
With the enrollment period for health care coverage under the Affordable Care Act (ACA) little more than four months away, employers are gearing up to inform their workers of the big changes ahead.
For employers who have not yet decided whether to continue offering health coverage or pay the fine for dropping coverage, “now is the time to think about that,” Andrew Molloy, assistant vice president of health management and insurance programs at Unum, said in an interview with InsuranceNewsNet.
So far, it appears the vast majority of employers will keep their coverage for full-time workers, according to a recent poll by the Foundation of Employee Benefit Plans. The survey found that 69 percent of employers will “definitely” continue to provide employer-sponsored health care when the exchanges go live Jan. 1, 2014.
Proponents of health reform, including President Barack Obama, said workers who receive good coverage under their employer-sponsored plan are likely to maintain that coverage, either with existing plans or something very similar.
Employees have an advantage under employer-sponsored coverage models, thanks to the power of group health pricing. Employers benefit as well because of the tax advantages associated with offering workplace-based coverage.
Corporate human resources departments, therefore, are working overtime to inform employees of the big changes. Everyone from insurance carriers to benefits brokers to payroll administrators are racing to inform clients of the changes through brochures, podcasts, blog postings, webinars and dedicated webpages.
“We know that everybody needs to comply with the Affordable Care Act and they are going to try as hard as they can to reduce cost under their respective health care plan and certainly you need a health care compliance strategy to achieve that,” Dave Sanders, health and benefits legal practice with AonHewitt, said in a recent webcast.
For now, companies can focus on the compliance strategy. But, in the long term, they also will need a health care strategy, he said.
Government websites also are full of information about what employers and employees need to know before employees make an enrollment decision. Earlier this month, for instance, the Department of Labor issued guidance to companies on notification procedures of coverage options to employees under Section 18(B) of the Fair Labor Standards Act.
Unum, which offers, life, disability and voluntary benefits coverage, believes a more informed employer makes life easier for employees and insurance carriers.
“It’s important in our role that we educate our clients, and we mean it so that requires us to help our clients, or in some cases brokers, to understand what their implications are on their total benefit of decision making,” Molloy said. “We recognize that medical is the biggest driver of the benefit decision.”
The majority of employer-sponsored health plans begin coverage Jan. 1, 2014, following the three-month enrollment period from Oct. 1 to Dec. 31.
“Some employees will qualify for subsidies and qualify for the exchanges, and employees will be asking questions,” he said. If employees are not asking lots and lots of questions they really should be, Molloy said.
Unum clients and brokers, who play a key role in advising clients, have snapped up the company’s 50-page pamphlet outlining key steps and strategies companies should think about for 2014 and beyond, Molloy also said.
Big-picture questions many employers will want answers to include:
- whether to “pay or play,” meaning to pay the fine or play in the employer-sponsored health benefits marketplace
- whether they meet the 50 full-time-equivalent threshold under which they don’t have to offer coverage
- which states have a state-run exchange or have elected to default to the federal exchange (Fewer than half the states are establishing an exchange.)
The finer points of the law -- such as compliance with deductible limits and out-of-pocket expenses, the contributions to the Transitional Reinsurance Program by sponsors of self-insured group health plans, new limitations on Flexible Spending Accounts, who qualifies for subsidies and levies on medical device manufacturers -- are better left to benefits brokers and advisors.
Still, employers need to be informed in upcoming discussions with their brokers, and with Memorial Day weekend around the corner, many advisors and corporate benefits experts can expect this to be, if not a hot summer, then at least a long one.
“If you are a company that’s going to play and you haven’t thought about it, it’s time,” Molloy said.
© Entire contents copyright 2013 by InsuranceNewsNet.com, Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.
Employers’ confidence in health plans rising
Original article from ebn.benefitnews.com
By Tristan Lejeune
The vast majority of employers are actively developing tactics to work within the Affordable Care Act and companies’ confidence in employer-sponsored health care is up. These are among the results of the International Foundation of Employee Benefit Plans’ 2013 survey, released ahead of the group’s Washington Legislative Update conference, held today and tomorrow.
Only 10% of employers are still in a “wait-and-see mode” regarding health care reform regulations, according to the survey 2013 Employer-Sponsored Health Care: ACA’s Impact; the rest are busy taking steps to deal with reform’s rules and regulations.
Sixty-nine percent of employers tell the IFEBP that they definitely plan to provide employer-sponsored health care when exchanges begin in 2014; in 2012, only 46% of companies were willing to commit to that. An additional 25% say they are very likely to continue the offering.
Changes, however, are coming. Eighteen percent of employers have increased plan participants’ share of premiums, and a quarter plans to do so over the next year. Of those making changes, 25% are upping their emphasis on high-deductible health plans and health savings accounts, and 14% are assessing the feasibility of adding one.
“Employers across the country have to deal with the impact of implementing the ACA while still being able to provide competitive benefits for their employees,” says Julie Stich, research director for the IFEBP. “Employees across the board can expect to see changes in how their employer-sponsored health care plans operate.”
Benefits leaders are also doing more to spur healthy behavior: 19% are either developing an organized wellness program, or expanding an existing one. Fourteen percent of respondents are either adopting or expanding healthy-lifestyle financial incentives, and another 25% plan to do so in the next year.
“We are seeing trends that indicate more changes may be on the horizon. More and more organizations are losing their grandfathered status, dropping from 45% in 2011 to 27% in 2013,” says Stich. “Also many organizations are redesigning their plans to avoid the 2018 excise tax on high-cost or so called ‘Cadillac plans.’ In 2011, only one-in-ten indicated they were redesigning their plan to avoid the additional tax, but we’ve seen a steady increase over the past two years that shows the number will soon double.”
CBO lowers health reform 'Cadillac' tax, employer penalty estimates
Original article from businessinsurance.com
By Matt Dunning
The Congressional Budget Office has nearly halved the revenue it expects the federal government to collect from employers through the health care reform law's so-called “Cadillac tax.”
Excise taxes on employers' high-premium insurance plans are expected to generate about $80 billion over the next 10 years, the CBO said Tuesday in a report updating its federal budget projections for fiscal years 2013-2023.
The revised estimate is a nearly 42% decrease from the $137 billion in excise tax revenue that the CBO projected in February.
Beginning in 2018 under the Patient Protection and Affordable Care Act, the Internal Revenue Service will impose a 40% excise tax on employer-sponsored health benefits that cost more than $10,200 for individual coverage and $27,500 for family coverage.
In its report, the CBO said it reduced its estimate on excise tax revenue after examining recent cost trends in employer-sponsored health benefits.
“As a result, we now expect fewer employment-based plans to be subject to the excise tax on high-premium insurance plans and, consequently, have reduced our estimate of revenues from that tax by $58 billion over the 10-year period,” according to the agency's report.
Employer mandate
The CBO also lowered its projections for revenue collected through penalties included in the health care reform law's employer mandate. Under the law, employers with more than 50 full-time workers — defined as employees working 30 hours or more per week — will be required to offer qualified, affordable group health benefit plans to their employees beginning in 2014.
Failure to meet those requirements will result in a $2,000-per-employee tax penalty if an employer's health care plans are not offered to at least 95% of full-time employees and just one full-time employee uses a premium subsidy to purchase coverage offered through a state- or federally-facilitated health insurance exchange.
The CBO projects the federal government will collect about $140 billion from the employer mandate penalties for the 10-year period, down from the $150 billion it projected in February.
The agency said the revision is due mainly to refinements in the IRS' calculation of households' estimated marginal tax rates, which led to a slight increase in the number of the individuals predicted to be enrolled in an employment-based health plan.
However, the CBO also said the projected net decline in the number of lives enrolled in employer-sponsored plans largely offset those gains.
“That slight increase in projected employment-based coverage increases the estimated loss of government revenues from the exclusion from taxation of employers' payments of health insurance premiums for their employees,” the CBO said in the report.
Medicaid expansion could spell trouble for patients
Original article https://www.benefitspro.com
By Kathryn Mayer
Medicaid is poised to expand in a big way — thanks to the Patient Protection and Affordable Care Act — but just who is going to treat those new patients?
That’s the major flaw of Medicaid expansion, according to new analysis from HealthPocket, a website that compares and ranks health plans.
HealthPocket’s research found that physicians across the board report low acceptance rates for Medicaid patients — and physician assistants and nurse practitioners are unlikely to fill the gap, raising the question of whether Medicaid expansion will simply leave more Americans insured but with no one to go to for their care.
Only 43 percent of doctors report that they currently accept Medicaid patients. At the same time, physician assistants and nurse practitioners — viewed by many as a potential solution to the primary care physician shortage — report that only 20 percent of them accept Medicaid.
Results of HealthPocket’s study were based on data from National Provider Identifier registry which included information self-reported by more than 1 million health care providers.
“Ensuring there are sufficient health care providers available to the newly insured — even those with private insurance — is a major public health challenge right now,” Kev Coleman, head of research and data at HealthPocket, said in a statement. “But if the current Medicaid acceptance rates hold true for 2014, timely access to care for those relying on Medicaid is likely to become more difficult as enrollees increase for an already inadequate pool of doctors.”
Historically, Medicaid payments to doctors have been lower than payments from both private insurance and Medicare despite being for the same service. According to the Kaiser Family Foundation, Medicaid pays doctors only 66 percent of the amount Medicare pays for the same service.
PPACA includes provisions to raise reimbursements rates of Medicaid compared to Medicare and other plans, but those have not fully been implemented and offer only a temporary two-year increase.
Previous reports also have found that physicians are hesitant to accept Medicaid patients, but HealthPocket’s survey is different because it also examines Medicaid acceptance rates for PAs and NPs, potentially signaling a greater problem than initially thought.
That’s already on top of a continuing — and growing — doctor shortage. The Association of American Medical Colleges predicts there will be a shortage of 90,000 doctors by 2020, half of whom are primary care physicians. The influx of new patients under PPACA will have profound implications for patient access to medical care, doctor groups have warned.
Many states have been struggling with whether not to expand Medicaid, the government health insurance program for the poor, despite the fact that the federal government will pay the full cost of the new enrollees for three years, and much of the costs thereafter, under health reform. Though the administration had intended for the expansion to be mandatory, the Supreme Court ruled last year that states could opt out, leading many Republican governors to do so.
A recent Gallup report also signaled challenges and costs ahead for an expanded Medicaid program: The research found that Medicaid patients are significantly worse health than those with employer-sponsored coverage.
A third of Medicaid patients are obese, while another 22 percent are being treated for depression and 24 percent are being treated for high blood pressure, according to the latest Gallup-Healthways Well Being Index. Medicaid patients are also more likely suffer from diabetes and asthma.
Some researchers worry that those who most need treatment simply won’t be able to access it.
“No matter if you live in a city with a high or low average income, finding a Medicaid provider is a challenge,” Coleman said. “New Medicaid enrollees are going to have to do some digging to make sure they can find a doctor or another type of practitioner willing to see them and accept these reimbursement rates.”
Workers wildly unprepared for health care changes
Original article https://ebn.benefitnews.com
By Tristan Lejeune
The third annual Aflac WorkForces Report, released last week, reveals a sobering gap in employee readiness to handle and take on the shift toward consumer-driven health plans and defined contribution health. A majority of workers (54%) would prefer not to have more control over their insurance options, citing a lack of time and information to manage it effectively, and 72% have never even heard the phrase “consumer-driven health care.”
Aflac and Research Now surveyed 1,884 benefits leaders and 5,229 wage-earners and found arresting disconnects in their expectations, plans and views of the future. For example, 62% of employees think their medical costs will increase, but only 23% are saving money for those hikes. A full three-quarters of the workforce think their employer will educate them about changes to their health care coverage as a result of reform, but only 13% of employers say educating employees about health care reform is important to their organization.
“It may be referred to as ‘consumer-driven health care,’ but in actuality, consumers aren’t the ones driving these changes, so it’s no surprise that many feel unprepared,” says Audrey Boone Tillman, executive vice president of corporate services at Aflac. “The bottom line is if consumers aren’t educated about the full scope of their options, they risk making costly mistakes without a financial back-up plan.”
Aflac reports what many benefits leaders instinctively know: Consumersalready find health insurance decisions intimidating and don’t welcome increased responsibility. Fifty-three percent fear they might mismanage their coverage, leaving their families less protected than they are now. And significant ignorance remains: Plan participants are not very or not at all knowledgeable about flex spending accounts (25%), health savings accounts (32%), health reimbursement accounts (49%) or federal or state health care exchanges (76%).
According to Aflac, 53% of employers have introduced a high-deductible health plan over the past three years, and that trend shows no sign of slowing. Yet more than half of workers have done nothing to prepare for changes from HDHPs, the Affordable Care Act or other system shifts.
“It’s time for consumers to face reality,” Tillman says. “Ready or not, they are being put in control of their health insurance decisions – and that means having to make choices that could have a big impact on personal finances. If employers aren’t offering guidance to workers on how to make crucial benefits decisions, the responsibility lies in the hands of consumers to educate themselves.”
Wellness programs dealt setback under proposed IRS rules
Original article https://www.benefitspro.com
By Allen Greenberg
The IRS, in what would be a blow to employers, is proposing companies shouldn’t be allowed to count the cost of wellness programs in their health care plans under the Patient Protection and Affordable Care Act.
Should it be affirmed, the rule would force employers to spend more to meet the law’s minimum value provisions.
Wellness programs are a key part of the PPACA.
The law was written with the idea that more employers would put wellness programs in place or expand existing such programs to help improve the health of Americans and help control health care spending.
Specifically, the hope is that more employers might reimburse workers for the cost of fitness center membership, reward employees for attending a monthly, no-cost health education seminar; or that they reward employees who complete health risk assessments.
The proposed rules from the IRS, however, wouldn’t allow employers to consider the costs of wellness programs in establishing whether they’ve reached the government’s definition of “minimum coverage” under the ACA.
Only wellness programs designed to prevent smoking will qualify, the IRS said.
Under PPACA, a large employer must pay an excise tax penalty if it fails to provide minimum coverage for even one full-time employee, forcing that employee to get a tax credit to buy health insurance through one of the new insurance exchanges, or marketplaces.
Labor unions that worried some employers might try to skirt minimum health care coverage by including wellness programs welcomed the news.
"We are very happy with the rules," Dania Palanker, senior counsel for the National Women's Law Center, told reporters.
But employer advocates were disappointed, calling it a setback.
The public has until July 2 to submit comments to the IRS for changes.
Click here to read the IRS’s proposed ruling.
How should insurers pay their PPACA fees?
Original article https://www.benefitspro.com
By Allison Bell
A team at the National Association of Insurance Commissioners is trying to figure out how health insurers should get the cash to pay billions of dollars in Patient Protection and Affordable Care Act fees.
The team -- the Health Care Reform Regulatory Alternatives Working Group -- has come up with five ways insurers could handle the fact that the new PPACA fees are supposed to kick in on Jan. 1.
The working group has described the options in a rough draft of a discussion paper posted on the Health Actuarial Task Force section of the NAIC's website. The NAIC created the group to give regulators from states that are skeptical about PPACA a way to share ideas about how to cope with the law. The discussion paper drafters used estimates from the American Action Forum, a group that opposes PPACA, in the paper draft.
The new PPACA fees could cost health insurers $20 billion in 2014 -- an amount equal to about 3 percent of their revenue, the drafters said, citing the American Action Forum figures.
The drafters talked only about the mechanics of how insurers should handle the fees, not their views about whether insurers should have to pay the fees.
Because the PPACA fees resemble excise taxes, "it seems legitimate for an insurer to include such fees in the premium," the drafters wrote in the paper. "Then the question is when an insurer should reflect the fees in the premium.
The drafters list the following options:
- Have insurers file rates that extend for the entire 12-month policy year. An insurer could include a portion of the PPACA fees payable in 2014 starting on the policy anniversary in 2013.
- Have insurers file rates that extend for the entire 12-month policy year, with no inclusion of PPACA fees in 2013. Let the insurers bill for PPACA fees separately starting Jan. 1, 2014.
- Have insurers file rates that extend for the entire 12-month policy year. Don't let insurers include PPACA fees in the 2013 premium rates but let the insurers have their rates change to reflect the new fees on Jan. 1, 2014.
- Have insurers file rates that extend only until Dec. 31, 2013, with no inclusion of PPACA fees. Require the insurers to submit new filings for rates effective on Jan. 1, 2014.
- Prohibit insurers from including PPACA fees in their rates until the first policy anniversary that occurs on or after Jan. 1, 2014.